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 U.S. District Judge Richard Leon said the Fair Housing Act allows
for only direct discrimination claims and not those based on
so-called disparate impact allegations. Leon wrote that the
administration's view that the language of the Fair Housing Act
assumes that disparate impact claims are permitted "appears to be
nothing more than wishful thinking on steroids."
The ruling was a win for the American Insurance Association and
other business groups that oppose disparate impact claims, which
allow for a broad range of business decisions related to housing to
be subject to civil rights litigation.
As an example of such a claim, the National Fair Housing Alliance
sued Allstate Corp in 2012 for refusing to insure flat-roofed houses
in Delaware, claiming the practice had a discriminatory effect on
poor minorities most likely to live in such buildings.
The immediate impact of Leon's decision is limited as the U.S.
Supreme Court last month said it would take up a related case and is
likely to decide by the end of June once and for all whether the
Fair Housing Act allows for disparate impact lawsuits.
The Fair Housing Act, passed in 1968, does not specifically allow
disparate impact claims but courts have permitted lawsuits making
such allegations for decades. The Supreme Court has never ruled on
the issue.
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In recent years, the high court has twice agreed to hear a disparate
impact case but both times the dispute was settled before the
justices could rule.
The U.S. Department of Housing and Urban Development issued the rule
in 2013 to codify the administration's position that disparate
impact claims should be allowed. The move came after it became clear
the Supreme Court was likely to rule on the issue.
The case is American Insurance Association v. U.S. Department of
Housing and Urban Development, U.S. District Court for the District
of Columbia, No. 13-00966.
(Reporting by Lawrence Hurley; Editing by Will Dunham)
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